Sberbank was awarded a license to issue and exchange digital assets by the Russian Central Bank on Thursday.
The announcement comes less than two months after the central bank called for a total ban on cryptocurrency trading, mining, and use. As it seeks to lessen the impact of Western sanctions, the bank’s announcement on Thursday may provide it with other alternatives.
Sberbank Pulls Out from EU Markets
Russia’s largest retail bank, Sberbank, has announced its exit from European markets. Sanctions’ noted impact on Russian-exposed sectors and cash outflows from Europe-based subsidiaries.
Green Light for Digital Assets
Sberbank, a state-owned bank, and Lighthouse, a financial ecosystem, have both added to the CBR’s roster. They were given the authority to create and exchange digital financial assets on their platforms.
The bank’s platform allows businesses to develop their own digital assets in order to raise financing. The bank has added the ability to purchase digital assets through its system or execute other digital asset transactions.
On the other hand, Sberbank’s transaction business unit is led by Sergey Popov. He stated that they are still in the early stages of using digital assets. Companies will be able to perform their first transaction on Popov’s blockchain platform in a month, according to Popov.
Sanctions to the Lender
Sberbank has sanctioned by the United States and the European Union. According to the US Treasury, it has the largest share of Russian savings accounts. It also serves as the country’s main creditor.
Additionally, the foreign depository shares of the London Stock Exchange have dropped over 100%. Trading halted at the same time, with the final recorded price being $0.05 apiece.
Furthermore, Sberbank asked for a permit to generate its own digital money for corporate customers with Russia’s central bank in January. It sought to make the digital asset available to the businesses with which it works.
On the other hand, Gref German is the CEO of Sberbank. In late 2020, he stated that the bank was working with JP Morgan, an American global investment bank, to develop its own cryptocurrency. Sbercoin was the name given to it, however it has yet to be released.
Russian Bank’s Lifeline
Sberbank has hit devastating fines. It was also accompanied by the central bank’s apparent policy shift on cryptocurrency. This sparked conjecture that digital currencies could provide the bank with a “shot in the arm.”
Analysts, on the other hand, believe that sanctioned financial organizations will not be able to avoid sanctions by using cryptocurrency.
Fears that cryptocurrency could undermine Russia’s financial stability, citizens’ wellbeing, and monetary policy autonomy. The central bank has fought with Russia’s finance ministry, which seeks to keep a tight grip on the cryptocurrency market.